WORST IN U.S.: Poulson Warns Colorado’s PERA Is Most Troubled Pension

Published on February 4, 2013 by

Barry W. PoulsonEchoing what the Peak has been writing for at least six months, Independence Institute’s Senior Fellow in Fiscal Policy, Barry Poulson, is now joining those who are sounding the alarm about the poor state of Colorado’s public employee retirement plan.  From his recent op-ed to the Colorado Springs Gazette:

There is no other pension plan in the country that imposes such a financial burden on future taxpayers. Every household in Colorado would have to pay $1,739 more in taxes annually, just to meet pension obligations.

Poulson also calculated that if PERA’s financial analysts were to use current market realities to calculate the amount from paychecks needed to pay this liability, the employee contributions would increase from 11.3% of pay to a whopping 53.9%.
Poulson points to a harsh reality that Colorado needs to face in order to get its financial ducks in a row.  In the piece, he also calls for a “hard-freeze” for pension plan benefits:

In states such as Colorado only a hard freeze will generate revenue savings in the pension plan. In a hard freeze all employees, including current employees, are required to enroll in a defined contribution plan; all future benefits in the defined benefit plan are terminated. The benefits already earned by current employees and retirees in the defined benefit plan are fully funded, and Social Security benefits are extended to all employees.

These are hard times, which call for tough spending decisions.  While we’re happy that more are jumping on the PERA awareness bandwagon, we’re still waiting for the Democratic legislature and teachers unions to actually take a long-term view of the issue for the benefit of Coloradans as a whole and state workers.

 

 
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